Short facebook. On Nov 14th, it will be trading under $10

[nillionaire]

You're citing articles from August, which were before Zuckerberg's decision not to sell any this year, so the info is probably out-of-date.

Here's an official source - FB's latest 10-Q: http://www.sec.gov/Archives/edgar/data/1326801/000132680112000006/fb-9302012x10q.htm

"November 14, 2012 - approximately 773 million outstanding shares and approximately 31 million net-settled Pre-2011 RSUs not held by then-current employees as of October 15, 2012"

 

[peilthetraveler]

Quote from nillionaire:

You're citing articles from August, which were before Zuckerberg's decision not to sell any this year, so the info is probably out-of-date.

Here's an official source - FB's latest 10-Q: http://www.sec.gov/Archives/edgar/data/1326801/000132680112000006/fb-9302012x10q.htm

"November 14, 2012 - approximately 773 million outstanding shares and approximately 31 million net-settled Pre-2011 RSUs not held by then-current employees as of October 15, 2012"

You could be right. Sucks when I get the wrong information. Either way though, adjusting for the new numbers, I still expect approximately a 17% decline in price, which would put the stock at around $17.50ish on Nov 14th(if the price stays around $21 till then.)

 

[FrankSlaughtery]

also another benefit to buyer a higher delta (less otm) option is that the commission costs are dramatically reduced.

eoption is the cheapest out there for buying large size at once so unless you're using them or have another special deal buying thousands of options at 0.05 would cost a fortune in commissions

 

[mutluit]

For options traders:
Be warned: my calcs show that one shouldn't invest anything in such titles with high volatility / IV, as the profit, if any, is very meager...

 

[fareastcoast]

I am short FB since 21.50 a couple days ago. Decisively broke below $21 today, but that's just due to market pressure.

I'm going to wait for the 14th, but if nothing significant happens, it will be time to cover. From the last couple days of trading, it is clear that FB has plenty of buyers and it might not crash that badly.

The difference between this lockup expiration and the previous ones is that this comes on the heels of FB's positive earnings announcement. This has changed a lot of people's perspectives about the stock.

 

[marcoPolo21]

Quote from fareastcoast:

I am short FB since 21.50 a couple days ago. Decisively broke below $21 today, but that's just due to market pressure.

I'm going to wait for the 14th, but if nothing significant happens, it will be time to cover. From the last couple days of trading, it is clear that FB has plenty of buyers and it might not crash that badly.

The difference between this lockup expiration and the previous ones is that this comes on the heels of FB's positive earnings announcement. This has changed a lot of people's perspectives about the stock.

my sources tell me you should cover - now

because the market may have given you a gift today, with the election

on the other hand, there's a 50% chance they could be wrong

marc

 

[fareastcoast]

There's a HUGE amount of short interest in FB right now. It is highly susceptible to a short squeeze. If there is a squeeze, it will be one of epic proportions, I'm talking 10% rally.

On the other hand, all shorters are holding out to see what happens on the 14th. If nothing happens, there will be a huge rush to the exits.

Does anybody know exactly how lockup release happens? Do the FB employees suddenly have a brokerage account at one of the underwriters, and can then login and sell shares? If the lockup expires on the 14th, do they instantly get access to those shares and are able to sell online, or do they have to wait a couple days for the account to be set up?

 

[peilthetraveler]

Quote from fareastcoast:

There's a HUGE amount of short interest in FB right now. It is highly susceptible to a short squeeze. If there is a squeeze, it will be one of epic proportions, I'm talking 10% rally.

On the other hand, all shorters are holding out to see what happens on the 14th. If nothing happens, there will be a huge rush to the exits.

Does anybody know exactly how lockup release happens? Do the FB employees suddenly have a brokerage account at one of the underwriters, and can then login and sell shares? If the lockup expires on the 14th, do they instantly get access to those shares and are able to sell online, or do they have to wait a couple days for the account to be set up?

73 million shares are short in this stock. Thats not huge when you consider there are about to be 2 billion shares on the market. Thats less than 5% short interest. Basically if only 10% of the lockups sold their shares and 100% of all shorts covered on that same day(would never happen, but for arguments sake...) then the stock would be a wash.

 

[fareastcoast]

Quote from peilthetraveler:

73 million shares are short in this stock. Thats not huge when you consider there are about to be 2 billion shares on the market. Thats less than 5% short interest. Basically if only 10% of the lockups sold their shares and 100% of all shorts covered on that same day(would never happen, but for arguments sake...) then the stock would be a wash.

How recent is your 73 million shares information? That data is probably several weeks old, the present situation is probably far different (and far more short). Particularly if the 73 million short interest was prior to the earnings announcement.

 

[peilthetraveler]

Quote from fareastcoast:

How recent is your 73 million shares information? That data is probably several weeks old, the present situation is probably far different (and far more short). Particularly if the 73 million short interest was prior to the earnings announcement.

3 weeks ago. A month before that it was 78 million short. What difference does several weeks make? Likely it will only be a few million difference. Even if I'm off by 10 or 20 million, you think the stock wont drop on a day when a potential 773 million shares are going to be sold?